Chargeback Rights – Are There Any Stipulations Too?

Dec 26, 2015

Customers have the absolute liberty to raise chargeback requests whenever applicable. It is an absolute privilege for the customer to exercise this right when he considers being wrongly charged. But, are the merchants too equipped with the necessary rights to favorably respond to such requests without facing the heat?

Yes, the merchants also have the necessary rights but these depend on the chargeback regulations & reason code linked with the transaction dispute. Merchants will be affected in different manners by the different cases of chargebacks. Here, we will analyze different stipulations that exist for chargeback rights –

Salient Points Related to Stipulations of Chargebacks…

  • When it comes to chargebacks, it’s not just the customers but merchants too have rights. However, there are a few limitations related to chargeback rights. Let’s take a look at a few of these –
  • Chargeback can be filed for complete transaction amount, a fixed portion of it or different partial amounts. However, chargeback of all partial amounts when summed together can never exceed the actual transaction amount.
  • Chargeback amount can include delivery charges (shipping fees) for a product that has not been received including any surcharges related to the disputed transaction.
  • It’s not practical to file chargeback for cash-back portion in the case of a cash-back transaction.
  • In case an ordered item reaches the customer post the delivery date, then before seeking chargeback, the customer should return the item.
  • In case the customer sends back the item, it’s not possible for the issuer to process chargeback before 15 days have elapsed from the date when return was made. Henceforth, the merchant gets ample time to provide refund.
  • As per the requirement of various reason codes, the cardholder needs to resolve all issues pertaining to the transaction before filing a chargeback. Accordingly, the issuer also needs to verify this action.
  • The chargeback time limit purely depends on the reason code. The customer typically needs to file a chargeback within a span of 45, 60, 90, 120, or 540 days. The time is counted from the day the transaction gets posted, the date of issue of the credit card statement, the date of discovering the issue with transaction, or other relevant dates as per the reason code.
  • Normally, it’s essential to complete all steps of chargeback process prior to proceeding to the arbitration process.

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